High-end estate agent Savills has said its profits for this year will be significantly below forecast, only two months after issuing an initial profit warning, as sales fall and house prices shed value.

The UK listed property consultant, which often relies on City bonuses to bolster sales, said this morning its 2008 profit will be well below analysts expectations and it would "consider its dividend policy" in light of late 2008 and early 2009 trading.

Just six weeks ago, the company reported that it was trading well in difficult markets.

Today Savills said it has seen a sharp decline in business in September and October, especially in Europe and the US, as the financial crisis has deterred many potential housebuyers.

The company said it normally experiences a pick up in business in December.

However, the company said: "Our consultancy businesses are continuing to trade well but are starting to see the effects of the challenging market conditions with a slowdown in new instructions."

Savills said: "The steps that we continue to take to reduce costs and our successful strategy of reducing dependence on transactional income will continue to serve us well in these uncertain times."

Last month recorded the second steepest falls on record for property valued at over £10m (€12m), superseded only by October, which suffered falls of 3.9% in value, according to the latest Knight Frank Prime central London index.

Prices are now 14.1% lower than last year, and have fallen by a total of 9.3% over the last three months alone.

Savills is not the only top end estate agent that has suffered because of the housing slump. Earlier this month Knight Frank, the London-based high end property agent, suffered a decrease in full year profits of 6.9% to £59.2m from a year ago, and the agent's partners took pay cuts of almost a third.

Property website Rightmove reported in November that its estate agency membership had dropped by 15% as businesses collapsed, while in October the Royal Institution of Chartered Surveyors said housing transactions in the UK were at their lowest level for 30 years, with estate agents selling an average of just one house a week.